Class Action Arbitration Waivers Under Attack

Description

One of the most contentious issues in consumer and employment class action litigation has been the enforceability of class action waiver provisions in mandatory arbitration clauses. Several recent court decisions have struck down wavers and a true split among the circuits is arising.

The Second and Third Circuit Courts of Appeal recently invalidated class action arbitration waivers in consumer contracts. Two recent California state appellate courts have invalidated the waivers in employment contracts.

Counsel must carefully draft arbitration provisions and waivers of class action arbitration to maximize enforceability. Given the courts' increasing hostility to these waivers, companies must now consider engaging in limited class arbitration with arbitral procedures tailored to the proceedings.

Listen as our authoritative panel of attorneys discusses recent trends against enforceability of class action waivers, drafting techniques to maximize enforceability, tips for defending waivers in litigation, and limited class action arbitration alternatives.

Outline

1. Recent Court Rulings and Statutory Developments
   1. Homa v. American Express Company (3rd Cir. 2009)
   2. In re American Express Merchants Litigation (2nd Cir. 2009)
   3. Chalk v. T-Mobile USA, Inc. (9th Cir. 2009)
   4. Franco v. Athens Disposal Co., (Cal. App. 2009)
   5. Sanchez v. Western Pizza Enterprises, Inc. (Cal. App. 2009)
   6. Laster v. T-Mobile USA, Inc. (cert. den. Sup. Ct. 2008)
   7. Statutory developments
2. Strategies for Drafting Class Action Arbitration Waivers
   1. Principle of bilaterality or fairness
   2. Cost of arbitration
   3. Location of arbitration
   4. Choice-of-law clause
   5. Right of prevailing consumer or employee to recover counsel fees
   6. Contractual fee-shifting clause
   7. Limited class action arbitration alternatives
   8. Stolt-Nielsen SA v. AnimalFeeds Int’l. Corp. (cert. granted Sup. Ct. 2009)
3. Best Practices for Enforcing Class Action Waivers in Court
   1. Reliance on case law enforcing waivers
   2. Class actions are just procedural devices
   3. Fee-shifting statutes
   4. Determining unconscionability at time of contracting, not when lawsuit filed
   5. FAA preemption arguments

Benefits

The panel will review these and other key questions:

• What are the lessons from In re American Express Merchant's Litig. (2nd Circuit) and Homa v. American Express Co. (3rd Circuit) for creating class action waiver clauses?
• What are the best practices for drafting arbitration clauses to maximize enforceability?
• What are the most effective defense strategies when a class action waiver agreement is challenged?
• When should companies consider limited class action arbitration?
• How can businesses act to preserve judicial involvement in class certification?

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